A popular crypto trader says a potential chart pattern indicates Ethereum (ETH) could be on the verge of a correction.
The analyst Ali Martinez tells his 69,400 followers on the social media platform X that ETH could be forming a rising wedge, a technical pattern that is typically interpreted as a bearish signal that indicates more downside price action after a bounce.
Martinez says the potential correction could take Ethereum down to $2,350, though he also notes that “the bearish outlook could be off the table” if ETH closes above $2,800.
Ethereum is trading at $2,567 at time of writing. The second-ranked crypto asset by market cap is down more than 4% in the past 24 hours and nearly 3% in the past week.
Martinez isn’t the first analyst to note ETH’s potential rising wedge: Earlier this week, veteran trader Peter Brandt warned that the pattern indicated Ethereum could plummet below $2,000.
“I am posting this not as a slam on ETH, even though I’m not a fan, but to describe how I trade. So ETHernuts, don’t take offense. I am as quick to go long on a good pattern as short on a good pattern.
1. Five-month rectangle (my favorite pattern) completed August 4th.
2. Retest of breakout line [August 14th].
3. Rising wedge on intraday chart.
Measured risk short. Move above $2,961 and I cut and run. Target is $1,651, so trade is a 3+ to 1 risk-reward ratio. Patterns fail to deliver implications well more than 50% of the time. I am never insulted when I am wrong. In fact, my assumption on every trade is that I will take a loss.”
Generated Image: Midjourney